Where Osama Loves to Shop

...A massive police presence is expected at the Defense Systems and Equipment International (DSEi) exhibition at the Excel Center in London's Docklands when it officially opens this morning to invited guests only. There were angry confrontations between police and demonstrators at the last arms fair two years ago, and similar protests are expected this time. The bill for policing is likely to cost the taxpayer millions of pounds.

The exhibition has been criticized by the Metropolitan Police for diverting resources during a period of heightened terror alert. Ken Livingstone, the Mayor of London, has also criticized the fair.

Among the 1,200 exhibitors from 34 countries are many which have made equipment used in Iraq. At the stand of Lockheed Martin, there are replicas of the Hellfire and Thaad (Theatre High Altitude Area Defense) missiles, both of which have been deployed in Iraq. Although the Hellfire is mainly as an air-launched missile, the version being promoted at DSEi is a new type for ground or sea launch. "It has been used regularly and very successfully in Iraq and this one is exactly the same," said Doug Terrell, a Lockheed Martin executive on the stand. "The US Army, Marine Corps and Special Forces absolutely love it." Almost 20,000 Hellfires have been sold worldwide.

The exhibition is run in conjunction with the Defense Export Services Organization (DESO), the arm of the Ministry of Defense that promotes the sale and licensing of British-made military equipment. Yesterday's press preview day included a catwalk-style show organized by DESO, with soldiers in full battledress posing with weapons. These included the British L96 sniper rifle used in Iraq as well as chemical detection equipment, airfield illumination systems and light anti-armour weapons...

DESO said invitations were issued after consultation with other departments such as the Foreign Office and the intelligence services... the majority were concerned with such areas as disaster relief, peacekeeping and humanitarian activities and homeland security.

What to buy this week:

* L96 sniper rifle. Made by Accuracy International and used by British troops, often as cover for bomb disposal experts.
* Hellfire Missile. Made by US-based Lockheed Martin. Normally fitted to Apache helicopters.
* The NLAW (Next Generation Light Anti-Tank Weapon) is a disposable, one man, portable high explosive system made in Britain by the French company Thales.
* THAAD (Theatre High Altitude Area Defense). Designed, says Lockheed, to destroy attacking missiles.

The countries:

* CHINA

Invited despite an EU embargo on arms sales and Tony Blair's statement in Beijing this month that there was a "question mark" over human rights.

* INDONESIA

Dubious human rights record over the conflicts in Sumatra and Irian Jaya has kept Indonesia on the uninvited list since 1999. Campaigners have documented "extrajudicial executions, arbitrary detention, torture, sexual violence and destruction of property" by the military in 2004-05.

* COLOMBIA

The Foreign Office said "members of the security forces collude with paramilitaries and are involved in drug trafficking".

* SAUDI ARABIA

Third-largest recipient of UK arms exports, where Amnesty International last year reported an escalation of "killings by security forces exacerbating the already dire human rights situation in the country". Foreign Office said the state "continued to violate human rights".

* ALGERIA

The Foreign Office says there are "numerous documented allegations of human rights abuses by the security forces and state-armed militias".

Peacekeepers, huh?

Does Halliburton still have a blue light special on nuclear reactors and detonators? For peaceful use only!

Let's outline what happened there:

Scandal-plagued Halliburton -- the oil services company once headed by Vice President Cheney -- sold an Iranian oil development company key components for a nuclear reactor, say Halliburton sources with intimate knowledge into both companies' business dealings.

Halliburton was secretly working at the time with one of Iran 's top nuclear program officials on natural gas related projects and sold the components in April to the official's oil development company, the sources said.

Just last week, a National Security Council report said Iran was a decade away from acquiring a nuclear bomb. That time frame could arguably have been significantly longer if Halliburton, whose miltary unit just reported a 284 percent increase in its second quarter profits due to its Iraq reconstruction contracts, was not actively providing the Iranian government with the means to build a nuclear weapon.

With Iran's new hardline government now firmly in place, Iranian officials have rounded up relatives and close business associates of Iran's former President and defeated mullah presidential candidate Hashemi Rafsanjani, alleging the men were involved in widespread corruption of Iran's oil industry, specifically tied to the country's business dealings with Halliburton.

On July 27, one of Iran's many state countrolled news agencies, FARS, an 'information' arm of the Islamic judiciary, announced the arrest of several of the executives of the Oriental Oil Kish Company, which is owned by Rafsanjani's children and other relatives.

"They were brought up on charges of economic corruption," according to a report posted on the Iran Press News website. "Following the necessary investigations by the judiciary's bailiffs, with warrants from the public prosecutor's office (mainly mullahs who only dole out Islamic jurisprudence), the case of economic corruption and malfeasance, certain of the authorities of Oriental Kish Oil Company have been arrested and under questioning. The head of the board of directors was also among those detained."

Now comes word that Halliburton, which has a long history of flouting U.S. law by conducting business with countries the Bush administration said has ties to terrorism, was working with Cyrus Nasseri, vice chairman of the board of directors of Oriental Oil Kish, one of Iran's largest private oil companies, on oil and natural gas development projects in Tehran. Nasseri is also a key member of Iran's nuclear development team and has been negotiating Iran 's nuclear development issues with the European Union and at the International Atomic Energy Agency.

"Nasseri, a senior Iranian diplomat negotiating with Europe over Iran's controversial nuclear program is at the heart of deals with U.S. energy companies to develop the country's oil industry," the Financial Times reported.

"A reliable source stated that, given the parameters, the close-knit cooperation and association of one of the key members of the regime's nuclear negotiation team with Halliburton can be an alarm bell which will necessarily instigate the dynamics of the members of the regimes' negotiating committee," according to the Iran Press News story.

Oriental Oil Kish is registerd in the United Kingdom and Dubai .

Nasseri was interrogated by Iranian authorities in late July for allegedly providing Halliburton with Iran 's nuclear secrets and accepting as much as $1 million in bribes from Halliburton, Iranian government officials said. During the first round of interrogations in the judiciary, a huge network of oil mafia has been exposed, according to the IPS report.

It's unclear whether Halliburton was privy to information regarding Iran 's nuclear activites. Halliburton sources said the company sold centrifuges and detonators to be used specifically for a nuclear reactor and oil and natural gas drilling parts for well projects to Oriental Oil Kish.

A company spokesperson did not return numerous calls for comment. A White House spokesperson also did not return calls for comment.

In 1991, Halliburton sold Libya , another country that sponsors terrorism, nuclear detonator devices. The company paid more than $3 million in fines for violating a U.S. trade embargo that President Reagan imposed in 1986 because of Libya 's ties to terrorist activities.

Oriental Oil Kish dealings with Halliburton became public knowledge in January when the company announced that it had subcontracted parts of the South Pars natural gas drilling project to Halliburton Products and Services, a subsidiary of Dallas-based Halliburton that is registered in the Cayman Islands.

Following the announcement, Halliburton said the South Pars gas field project in Tehran would be its last project in Iran . The BBC reported that Halliburton, which took in $30-$40 million from its Iranian operations in 2003, "was winding down its work due to a poor business environment."

Halliburton, under mounting pressure from lawmakers in Washington, D.C., pulled out of its deal with Nasseri's company in May, but has done extensive work on other areas of the Iranian gas project and was still acting in an advisory capacity to Nasseri's company, two people who have knowledge of Halliburton's work in Iran said.

In an attempt to curtail other U.S. companies from engaging in business dealings with rogue nations, the Senate approved legislation July 26 that would penalize companies that continue to skirt U.S. law by setting up offshore subsidiaries as a way to legally conduct business in Libya, Iran and Syria, and avoid U.S. sanctions under International Emergency Economic Powers Act (IEEPA). The amendment, sponsored by Sen. Susan Collins, R- Maine, is part of the Senate Defense Authorization bill.

"It prevents U.S. corporations from creating a shell company somewhere else in order to do business with rogue, terror-sponsoring nations such as Syria and Iran ," Collins said in a statement.

"The bottom line is that if a U.S. company is evading sanctions to do business with one of these countries, they are helping to prop up countries that support terrorism -- most often aimed against America ," she said.

The law currently doesn't prohibit foreign subsidiaries from conducting business with rogue nations provided that the subsidiaries are truly independent of the parent company.

But Halliburton's Cayman Island subsidiary never did fit that description.

Halliburton first started doing business in Iran as early as 1995, while Vice President Cheney was chief executive of the company and in possible violation of U.S. sanctions.

According to a February 2001 report in the Wall Street Journal, "Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is non-American. But, like the sign over the receptionist's head, the brochure bears the company's name and red emblem, and offers services from Halliburton units around the world."

Moreover, mail sent to the company's offices in Tehran and the Cayman Islands is forwarded to the company's Dallas headquarters.

Not surprisingly, in a letter drafted by trade groups representing corporate executives vehemently objected to the amendment saying it would lead to further hatred and perhaps incite terrorist attacks on the United States and "greatly strain relations with the United States' primary trading partners."

"Extraterritorial measures irritate relations with the very nations the United States must secure cooperation from to promote multilateral strategies to fight terrorism and to address other areas of mutual concern," said a letter signed by the Coalition for Employment through Exports, Emergency Coalition for American Trade, National Foreign Trade Council, USA Engage, U.S. Council on International Business and the U.S. Chamber of Commerce.

"Foreign governments view U.S. efforts to dictate their foreign and commercial policy as violations of sovereignty, often leading them to adopt retaliatory measures more at odds with U.S. goals."

Still, Collins' amendment has some holes. As Washington Times columnist Frank Gaffney pointed out in a July 25 story, "the Collins amendment would seek to penalize individuals or entities who evade IEEPA sanctions -- if they are "subject to the jurisdiction of the United States ."

"This is merely a restatement of existing regulations," Gaffney said.

"The problem with this formulation is that, in the process of purportedly closing one loophole, it would appear to create new ones. As Sen. Collins told the Senate: "Some truly independent foreign subsidiaries are incorporated under the laws of the country in which they do business and are subject to that country's laws, to that legal jurisdiction. There is a great deal of difference between a corporation set up in a day, without any real employees or assets, and one that has been in existence for many years and that gets purchased, in part, by a U.S. firm."

"It is a safe bet that every foreign subsidiary of a U.S. company doing business with terrorist states will claim it is one of the ones Sen. Collins would allow to continue enriching our enemies, not one prohibited from doing so," Gaffney said.

Going a step further, Dow Jones Newswires reported that the U.S. Securities and Exchange Commission sent letters in June to energy corporations demanding that the companies disclose in their security filings any business dealings with terrorist supporting nations.

"The letters have been sent by the SEC's Office of Global Security Risk, a special division that monitors companies with operations in Iran and other countries under U.S. sanctions, which were created by the U.S. Congress in 2004," Dow Jones reported.

The move comes as investors have become increasingly concerned that they may be unwillingly supporting terrorist activity. In the case of Halliburton, the New York City Comptroller's office threatened in March 2003 to pull its $23 million investment in the company if Halliburton continued to conduct business with Iran .

The SEC letters are aimed at forcing corporations to disclose their profits from business dealings rogue nations. Oil companies, such as Devon Energy Corp., ConocoPhillips, Marathon Oil Corp. and Occidental Petroleum Corp., that currently conduct business with countries that sponsor terrorism, have not disclosed the profits received from terrorist countries in their most recent quarterly reports because the companies don't consider the earnings "material."

Devon Energy was until recently conducting business in Syria . The company just sold its stake in an oil field there. ConocoPhillips has a service contract with the Syrian Petroleum Co. that expires on Dec. 31.

The detonators were stopped by some Agent embedded in the Company:

You’ve heard, of course, about the Israeli citizen who shipped 200 U.S.-made nuclear weapons detonators to Pakistan? Neither had we. It’s one of those stories that you’d think would rise to the surface, but sometimes doesn’t. AP has been doing its best, but not many papers have been running the stories (the case has gotten a lot of ink abroad).

In any case, here’s what we know. On Jan. 2, the feds arrested a guy named Asher Karni, who is described as an Israeli citizen living in South Africa, for illegally exporting the high-speed electrical switches, known as triggered spark gaps, to Pakistan. Besides detonating nuclear explosions, the devices appear to have one other use: their pulses can break up gall stones. In this case, we have to assume that the switches were destined for weapons use by Pakistan – at the moment our ally in the “war on terrorism,” but also a politically unstable nuclear power with a history of selling the technology to others.

In late January, the chief of the UN’s nuclear watchdog agency (such as it is) described the nuclear blackmarket centered around Pakistan as one of “fantastic cleverness” that benefitted both Libya (which recently pledged to give up its nuclear weapons programs) and Iran (which, absurdly, claims it has none).

Fortunately, Asher Karni’s plot was disclosed to U.S. authorities by a business associate. After being alerted by the feds, the switch-maker, Perkin Elmer Optoelectronics, disabled the shipment of switches so they’d be useless to whoever eventually received them, and the sale went ahead. Karni was arrested when he visited Colorado on a ski vacation.

Then – incredibly, IMHO -- the presiding judge let Karni, who I have to believe is a major flight risk, out of the slammer on bond on condition he agreed to electronic monitoring and stayed with a rabbi in Maryland (the case against him has been filed in U.S. District Court in D.C.). This Denver Post piece sums up some of the questions, and risks, involved in the case...

It's really hard to get your world war on when your Company still has some closet Agents in it worried about silly things like keeping weapons out of the wrong hands and keeping America safe.